Flora F. Gu

IMPROVING MEDIA DECISIONS IN CHINA: A Targetability and Cost-Benefit Analysis

This study examines two central issues underlying effective media decisions in China. We pay particular attention to the issue in reaching Chinas upscale and status-seeking consumers and the cost/benefits of so doing. In this study, we analyzed syndicated secondary data involving 48,000 respondents in 15 cities in China, and compared the extent to which television, newspapers, and general and special interest magazines reach particular consumer segments effectively. The study then used a second database containing cost information on media vehicles, and compared their efficiency in reaching segments of upscale/status-seeking consumers in China. As hypothesized, and in accord with findings in developed economies, we found that magazines have the highest targetability among the three most popular mass media. Among special interest magazines, fashion magazines are significantly more costly to advertise in, while they reach the same income segments as travel and business magazines. The implications of these findings on advertising research and practices are discussed.

Materialism among Adolescents in China: A Historical Generation Perspective

This study examines the development of materialistic values from a historical generation perspective. On a macro level, we examine critical societal events such as the Cultural Revolution and the globalization that may affect the materialistic values embraced by parents and adolescents in China. On a micro level, we delineate the impacts of financial resources and media exposure on individuals’ materialism. Based on the historical generation theory, we hypothesize differing levels of materialism, and differential mechanisms of materialistic development for the two generations. The hypotheses are tested on the survey data of 2,860 adolescents (age 15‐19) and 11,920 adults (age 40‐49, the parent generation). The results show that adolescents are more materialistic than the parent generation in terms of acquisition centrality, novelty‐seeking, and susceptibility to social influence. The results also show that media exposure exerts a strong influence on adolescents’ materialism while income does not register any significant effects. The effects are sharply reversed for the parent generation, with income as the key determinant and media exposure having no impact. The article closes with managerial and research implications.

Observer Effects of Punishment in a Distribution Network

In a distribution network, a punishment event not only affects the disciplined distributor but also changes the attitudes and behaviors of others in the network (i.e., observers). By moving beyond a dyadic view of punishment, this article considers the effects of punishment on observers and integrates insights from social learning, fairness heuristic, and social network theories. The resulting framework of the observer effects of punishment in a distribution network, empirically tested with a survey in China, reveals two mechanisms through which punishment leads to reduced observer opportunism: (1) a direct deterrence effect and (2) a trust-building process. Moreover, two information-related constructs moderate the observer effects differently. The disciplined distributors relational embeddedness, which motivates greater information flow to observers, aggravates the problem of information asymmetry against the manufacturer, making punishment less deterrent for observers. In contrast, the manufacturers monitoring capability, which reduces information asymmetry, strengthens observer effects. The authors discuss both theoretical and managerial implications of using punishment to achieve collaboration from a wide network of channel members.

Power or Market? Location Determinants of Multinational Headquarters in China

Multinational corporations (MNCs) have increasingly been establishing regional headquarters in China. However, no study has systematically examined how MNCs make strategic decisions about where to locate Chinese headquarters (CHQs) in this transition economy. The paper makes the first attempt to investigate the issue by focusing on two questions. First, what are the location-specific factors that determine where MNCs locate their CHQs? Second, how do these factors influence making the decision between Beijing and Shanghai, the two largest cities in China? We integrate existing literature and assess the differential roles of (1) path dependency, (2) institutional support, and (3) proximity to superior information. Data were collected through a large-scale survey of MNC CHQs in mainland China. The empirical analysis supports the three-dimensional framework and the central role of proximity to superior information in the decision-making process. The results advance existing understanding of MNC location decisions in China by revealing the unique interplay between power and market in this transition economy, and between Beijing and Shanghai, the two promising cities toward world city status, in particular.

Explorative versus Exploitative Alliances: Evidence from the Glass Industry in China

How do firms learn from their alliance partners? Do alliance learning outcomes vary among different types of alliances? Are the learning differentials contingent upon contextual factors in an emerging economy? To address these important questions, this study empirically delineates the nature of explorative and exploitative alliances, examines how they affect product and process innovations, and investigates how such effects vary in different contexts. Using a sample of 220 Chinese firms in the glass industry, we use the structural equation modeling procedure to analyze the data. We find that explorative alliances have a stronger impact on both product and process innovations than do exploitative alliances, product, and process innovations are positively related to both market and efficiency performance, and environmental turbulence enhances the impact of product and process innovations. Our findings provide implications for choosing between explorative and exploitative alliances in line with alliance objectives and firms’ resources, and environmental contexts.

Motivations for Adaptive Versus Substantial Commitment in a New Sales Program

This study identifies two distinctive modes of the distributor commitment to a manufacturer-initiated new sales program: substantial and adaptive commitment. We argue that the performance of these committed behavior depends on whether the major motivation is to obtain new benefits from the program (called merit-seeking motivation) or to avoid possible losses from non-participation (called loss-aversion motivation).

How Fair Is It? The Distributor’s View in Channel Collaborations

How to better motivate the distributor’s participation in channel collaborations is an ongoing concern for manufacturers. Previous research suggests that distributor participation is influenced by two types of variables: economic incentives and dependence dynamics. This study extends past research by investigating the role of fairness in affecting participation and long-term relationships. The contingent effect of fairness is observed along varying levels of distributor dependence. On the basis of a naturally occurred program, the authors collected data from a focal manufacturer’s distribution channel. The results indicate that (1) the distributor’s fairness perception has significant impacts on both compliance and relational outcomes; (2) the efficacy of fairness reduces as the distributor’s dependence on the manufacturer increases; and (3) the effect of economic incentives is strengthened as the distributor’s dependence increases. The authors discuss the theoretical and managerial implications of the study findings.

Pride as a Double-Edged Sword: Effects of CEO Hubris on Firm Market Exploration and Exploitation

Grounded in upper echelons theory and regulatory focus theory, this empirical study develops a theoretical model aiming to explicate the effect of CEO hubris, a prominent managerial bias, on market exploration and exploitation, as well as its boundary conditions. We predict that CEO hubris is positively related to market exploration while negatively related to market exploitation. Moreover, this study shows that those factors that affect a CEO’s information processing capacity can effectively moderate the hubris bias: the CEO’s industry experience weakens, whereas a high level of market uncertainty strengthens, the hubris effects. We test our hypotheses using a two- wave, multi-respondent original survey data set of Chinese trading companies. As a balance between market exploration and exploitation can enhance firm market performance, this study highlights the double-edged nature of CEO hubris. The results provide important implications for firms: it is possible to achieve superior market performance by b...